Accounting Treatment And Tax Treatment Of Share Payment

The rights and interests of the enterprise are awarded by equity settlement, including restricted stock and stock options, etc. the enterprise's obligations to pay cash or other assets based on shares or other equity instruments are cash settled equity payments, including simulated stock and cash stock appreciation. This article introduces the accounting treatment of share payment and the tax treatment of related taxes.

　　 First, Share payment Accounting treatment

Share payment usually involves four links: granting date, feasible right day, execution day and selling day. The date of award refers to the date of approval of the shareholders' agreement or similar institution by the share payment agreement. The date of feasibility is the date when the exercise conditions are met, and the workers or other parties have the right to obtain the equity instruments or cash rights from the enterprise. The right of execution refers to the date when the employees and other parties make the right, obtain cash or equity instruments, and the selling date refers to the date when the stock holders will exercise the options stock they sell.

(1) share settlement with equity settlement

The share payment paid for staff services shall be measured in accordance with the fair value of the equity instrument on the date of grant, in exchange for the fair value measurement of the services paid by other parties.

The payment of equity settlement shares immediately for the right to be exercised shall be included in the relevant asset cost or current cost on the granting date, and shall be included in the capital premium in capital reserve.

For the payment of equity settlement shares with a waiting period, no accounting treatment is made on the granting date, and the relevant services shall be included in the relevant asset cost or current cost in each balance sheet date of the waiting period, and shall be included in other capital reserves in the capital reserve. On the day of exercise, the premium of equity and equity is determined according to the exercise of the right, and the other capital reserves in the capital reserve confirmed during the waiting period are carried forward.

(two) share settlement in cash settlement

The cash settled equity payment for the right of immediate feasibility shall be included in the granting date on the basis of the fair value of the liabilities incurred by the enterprise on the granting date, or at the expense of the related assets.

For a cash settled share payment with a waiting period, no accounting treatment will be made on the grant date. On each balance sheet date during the waiting period, based on the best estimate of the right to be exercisable, the services obtained in the current period shall be included in the relevant asset cost or current cost according to the fair value of the liabilities assumed by the enterprise. Liabilities 。 If the cost is no longer recognized after the date of feasibility, the change of the fair value of the liabilities shall be included in the profits and losses of the current period.

　　 Two, tax treatment of personal income tax on share payment.

According to the Circular of the Ministry of Finance and the State Administration of Taxation on the issue of personal income tax on personal stock options, the supplementary notice of the State Administration of Taxation on the issue of personal income tax paid on individual stock options (tax letter [2006]902), the notice on issues related to the collection of personal income tax on income derived from stock appreciation rights and restricted stock (tax [2009]5), and the Circular of the State Administration of Taxation on the issue of personal income tax on equity incentives (National Tax Letter No. [2009]461), the tax treatment of personal income tax on share payments is as follows: [2005]35

(1) stock (stock listed companies' stock options) acquired by employees of enterprises (including listed companies and non-listed company).

Employee stock option (ESO) refers to a right granted by a listed company to the employees of the company and its holding enterprises according to the prescribed procedures, which allows the authorized employees to purchase a certain number of shares of the company at a certain price in the future time.

1. employees (including listed companies and non-listed company) obtain publicly traded shares (listed companies' stock options).

The income obtained from the employee's participation in the stock option plan shall be paid according to the market price of the stock option of the authorized day, and the personal income tax paid as the wages and salaries of the month of the employee's authorized date. The income from the form of wages and salaries in the form of stock options can be distinguished from other wages paid in the month.

The amount of tax payable is [= (the market price of the stock option of the authorized day mark - the right price per share paid by the employee to acquire the stock option) * the number of shares. The number of months specified is applicable to the applicable tax rate - quick deduction] * the prescribed number of months.

The number of prescribed months in the formula above refers to the number of months worked in the domestic work during the period from 12 to 12 months. The applicable tax rate and the quick deduction of the wage formula in the above formula shall be divided by the amount of the taxable income in the form of stock option, divided by the number of months after the prescribed month.

2. employees (including listed companies and non-listed company) obtain non publicly traded stocks (listed companies' stock options).

The income obtained from employees' participation in the stock option plan shall be paid according to the market price of each share of the exercise rights, and the personal income tax paid as the wages and salaries of the month of the day of the employee's right of execution. The income from wages and salaries in the form of the stock option can be distinguished from other wages and salaries received in the month, and the tax payable for the month shall be calculated separately according to the following formula:

The amount of tax payable is [[the market price of each share of the exercise stock - the right price per share paid by the employee to acquire the stock option] * the number of shares. The number of months specified is applicable to the applicable tax rate - quick deduction] * the prescribed number of months.

The number of prescribed months in the formula above refers to the number of months worked in the domestic work during the period from 12 to 12 months. The applicable tax rate and the quick deduction of the wage formula in the above formula shall be divided by the amount of the taxable income in the form of stock option, divided by the number of months after the prescribed month.

(two) employees get stock appreciation rights from listed companies, including listed companies inside and outside the territory.

Stock appreciation right refers to the right of a listed company to grant the company employees a certain amount of stock price increase in the future period and agreed conditions.

The authorized person exercises the right under the agreed conditions, and the listed company multiplied by the two level market share price difference between the exercise day and the authorized day multiplied by the authorized number of shares to be issued to the authorized person in cash. When a listed company gains the value added rights to the authorized person, the employee shall pay personal income tax according to the "wages and salaries" tax items, and the amount of the taxable income of a certain exercise right of the stock appreciation right = (exercise day, stock price - authorized day stock price) * the number of shares in the exercise right. Then calculate the tax payable according to the calculation method of stock option.

(three) employees obtain restricted stock from listed companies, including listed companies inside and outside the territory.

Restrictive stock refers to the amount of stock that a listed company has granted to a company's employees according to the terms stipulated in the equity incentive plan.

The employee shall pay personal income tax according to the "salary and salary income" when the lifting of the restricted stock of each batch. The amount of taxable income = (stock registration day stock market price + the current market price of the batch lifting the stock) shall be 2 x the number of shares lifted in this batch, the total amount of the total amount actually paid by the incentive object (the total number of restricted shares issued by the incentive object), and then the tax payable shall be calculated according to the calculation method of the stock option.

　　 Three, corporate income tax on share based payments. Tax treatment

In accordance with the provisions of the State Administration of Taxation on the handling of enterprise income tax on the implementation of the equity incentive plan of China's resident enterprises (the Announcement No. eighteenth of the State Administration of Taxation on 2012), the resident enterprises listed in China have set up a stock incentive plan for their employees, and the enterprise income tax shall be dealt with in accordance with the following provisions:

(1) when the equity incentive plan is implemented immediately, the listed company can calculate and calculate the difference between the fair price of the stock and the actual exercise price of the incentive object, and calculate and calculate the wage and salary expenses of the listed company in the current year, and carry out the pre tax deduction according to the tax law.

(two) after the implementation of the equity incentive plan, it is necessary to wait for certain service years or to meet the prescribed performance conditions. The relevant costs and expenses calculated and recognized in the accounting period during the waiting period of a listed company shall not be deducted from the calculation of the enterprise income tax in the corresponding year. After the equity incentive plan is exercised, the listed company can calculate and calculate the difference between the actual price and the actual exercise price of the stock in accordance with the difference between the actual price and the actual exercise price of the real right of the year, and calculate and calculate the wage and salary expenses of the listed company as a listed company, and deduct the tax in accordance with the tax law.

In the light of the provisions of China's accounting standards, the resident enterprises and non-listed company that have listed overseas in China and set up the employee equity incentive plan in accordance with the provisions of the administrative measures shall also be handled according to the relevant provisions of China's accounting standards.

In accordance with the provisions of the notice on the improvement of equity incentive and technology equity related income tax policy (fiscal and taxation [2016]101), a listed company grants individual stock options, restricted stock and equity awards to the competent tax authorities, and individuals may pay personal income tax within the period not exceeding 12 months from the date of the lifting of stock option rights, the lifting of restricted stock or the award of equity awards. The non-listed company grants the employees' stock options, equity options, restricted stock and equity awards to the employees of the company. If it meets the prescribed conditions, it may apply a deferred tax policy after filing with the competent tax authorities, that is, the employee can temporarily pay no tax when he obtains the equity incentive, and is entitled to pay the item "spanfer of property" when it is deferred to the spanfer of the equity interest. In addition, for the new and high technology enterprises, the Ministry of Finance and the State Administration of Taxation ([2015]116) stipulates that the national taxation policy for the pilot areas of national independent innovation zones should be extended to the whole country to implement the policy (fiscal and tax No. [2015]116). Since January 1, 2016, the high-tech enterprises in the whole country have spanformed the scientific and technological achievements and given the equity award to the relevant technical personnel of the enterprises. If it is difficult for individuals to pay taxes at one time, they may make their own installment tax plans according to the actual situation, pay them in installments in less than 5 calendar years (including), and submit the relevant information to the competent tax authorities for the record.

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